A watchdog group has lodged a complaint with the European Commission over concerns that Czech Prime Minister Andrej Babiš may be violating EU budget conflict-of-interest rules.

In an open letter, Transparency International's Czech chapter argued Wednesday that although Babiš, who built a business empire before entering politics, is no longer the formal owner of conglomerate Agrofert, he is still "the founder and 100% end-user of benefits" of the two trusts overseeing the firm.

Agrofert controls some of the largest areas of agricultural land in the Czech Republic and has a deep interest in many of the issues at stake in Common Agricultural Policy reform, as well as the broader EU budget negotiations.

Babiš said the complaint is based on lies. "Transparency International does not have any evidence," he wrote in a text message. "I fully respect the law."

He accused the head of the organization's Czech branch of becoming "part of a political fight against me."

"I have put my company to the private trust fund according to the Czech law and I gave up my business completely," he said.

Babiš accused Transparency International of lacking independence, pointing to funds the organization received in the past from ministries led by his political rivals, as well as the European Commission and the EU's anti-fraud agency OLAF.

David Ondráčka, head of Transparency International’s Czech branch, confirmed that Transparency International has been the recipient of funding from the country’s ministry of interior over the past decade, but noted that this funding was provided while the ministry was under the leadership of a variety of political forces, including Babiš' own party.

According to EU rules, individuals involved in the implementation and administration of the bloc's budget "shall refrain from any action likely to bring their interests into conflict with the interests of the Union."

Transparency International says Babiš, who is involved directly in the EU budget negotiations and agriculture policy talks, is potentially violating these rules.

As a founder and beneficial owner, Babiš oversees the management and "has the legal right to receive all contracts, documents, accounts, or any other information relating to the performance" of trusts overseeing Agrofert, the NGO wrote, adding that the prime minister "may terminate one or both trust funds at any time and take back the direct exercise of shareholder rights."

Agrofert is a major beneficiary of EU farm subsidies. The company received three times as much national and European subsidies in 2017 as it did in 2012, Transparency said in its letter.

The Czech government has been vocal in its opposition to some proposed reforms to EU agriculture policies, as well as the Commission's proposal to cut agriculture subsidies in the next long-term EU budget. However, under previous governments, Prague was also skeptical about changes to agricultural subsidy policy.

European Agriculture Commissioner Phil Hogan has proposed setting a ceiling of €100,000 on the amount that large farms receive in order to redistribute the savings to smaller struggling farms, a move that would likely hit Agrofert and other large Czech agriculture businesses hard.

The company declined to comment to POLITICO on the proposed policy's effect on its business.

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Ian Beaumont

It seems the EU Commission is making moves against any and all Eurosceptics

Posted on 9/19/18 | 10:19 PM CET

Ian Beaumont

It is becoming more obvious that we find ourselves in the position of George Orwells “1984”
Big Brother (The EU)
Ministry of Truth ( EU funded media)
Crushing all opposition to their plan

Posted on 9/19/18 | 10:30 PM CET

Irene Duym

The former Eastern block countries have forgotten what democracy and the rule of law are like. EU enlargement, in the aftermath of the fall of the USSR and the following enthusiasm concerning European “reunification” brought silly hopes that can never be met.

Posted on 9/19/18 | 10:49 PM CET

Ian Beaumont

Irene Duym,
Who would know better after living under communist dictators, rule of law , and what democracy means ?

They have longed for democracy , and will of course oppose any moves against it .

EU rule of law changes to counter opposition to their US of E plan

Posted on 9/19/18 | 11:01 PM CET

Nutella Loves You

Directly, there is no case. He already owned the company. Putting in trust does not create any conflict of interest. Therefore he took no action likely to bring his interests in conflict with union”. The entire structure of EU is premised on member states having divergent interests which they advocate for, otherwise it would be unitary superstate. Trying to make this EU issue when it is matter of Czech regulation is just desperation.

The article does at least allude to fact that much of Czech agriculture structure is based about entities larger than the proposed limit, not just Babis’ company. So the alleged conflict of interest is in fact merely in line with representing his countries’ actual agriculture.

And really, does anybody think the ruling powers in any EU member do not have economic interests? They are just going to retire on standard pension, that’s it? We can wait for Macron government to be removed from all financial policy since he has ties to finance, and German government from auto regulations.

Posted on 9/19/18 | 11:03 PM CET

Ian Beaumont

Irene ,
I am interested how your belief in the EU , and its goal of a US of E with fiscal , legal , Social and political control from Brussels , will somehow fix all the worlds problems .

Nirvana will never be

Posted on 9/19/18 | 11:14 PM CET

r s

@ Irene Duym
“The former Eastern block countries have forgotten what democracy and the rule of law are like.”
I think it is a bit of generalization, many postcommunist countries have not forgot that. It is mainly Visegrad group that is problematic.
The PM Babis is neither left or right or even nationalist or eurosceptic – he says we need eu a lot, by which he means he needs the EU money without bearing any responsibility. The situation in the czech rep is not so far that bad as in Hungary and Poland, where the governments succeded to muzzle the press and subjugate the justice. But it can become soon as bad as there. Beside other things Babis owns two influental newspapers.
The anti-EU commentators are trying to see Hungary or Poland as some noble rebels which they are definitely not. The idea that enemy of my enemy must be a nice chap is rather misleading.

Posted on 9/20/18 | 9:50 AM CET

François P

@Ian Beaumont

“It is becoming more obvious that we find ourselves in the position of George Orwells “1984”
Big Brother (The EU)
Ministry of Truth ( EU funded media)
Crushing all opposition to their plan”

Typical comment from a EU hater. The only fact so far is that an association is calling for the European Commission to do something. The European Commission itself hasn’t done anything so far.

EU funded media? Transparency International isn’t a media. It is a respected association active worldwide in the area of corruption prevention.https://www.transparency.org

Like many useful associations and charities, they receive public money to support their activities. Including from the Czech government according to the article. But probably from many other governments as well (including UK). In the case of Transparency International, I think this is money well spent.

I won’t comment on the details of what Transparency International is asking for in this article. I don’t know what the rules are in this regard. Not sure even that it is within the remit of the European Commission. And I am not assuming that Babis is doing anything improper either.

Nevertheless, I consider that the EU institutions are fully entitled to ensure that EU money is spent correctly. Conflict of interest rules are one aspect of ensuring that.

Posted on 9/20/18 | 10:20 AM CET

e c

So unelected apparatchiks from EU Commission that itself is not transparent will appraise democratically elected leader with strong public support ?!?

“The European Parliament voted by an overwhelming majority in favor of a report criticizing Selmayr’s appointment as the European Commission’s top civil servant, and calling for the entire process to be re-run by the end of the year and strongly condemning internal appointments that are not transparent.”

Excellent joke !
The last time something like that happened it was the USSR’s politburo assessing naughty Czech leadership and even sending troops there in 1968 to restore “order & democracy”.
Czechs remember that very well.

Posted on 9/20/18 | 10:53 AM CET

Ian Beaumont

Francois P
Typical comment from a EU hater.

If that’s how you see me , fair enough .

You being Anti UK , Pro EU supporter

We probably disagree on The Commissions actions on Hungary, Poland , and now there seems to be a move against Czechs, another migrant quota refusal country

The actions on Hungary and Poland (Article 7) removal of voting rights , would be an act against the citizens of those countries , denying them any chance to stop laws and regulations that could be seriously detrimental to those countries .

I am sure The EU would take full advantage by tabling those acts that would definitely be voted against by Hungary and Poland , in order to get the acts accepted by the other member states .

We can go into the facts that citizens of each member country were not given a referendum on each treaty , and the few referendums that were held , and voted against , were made to vote again (Ireland twice, Denmark once) .

I could go into Ireland being allowed a veto on changes to its tax system, to sway the second vote , and how Juncker wants to now do away with vetoes , and enact majority voting, that could see Irelands tax system being changed against its will .

You support these actions , I think they are dishonest, and purposely so

The EU wants a US of E
What will Brussels do with the power it gains after it takes control of all member states fiscal, Social, Political , and military policies ?